Semiconductors giant enters solar market

Global semiconductor equipment firm Applied Materials announced its entry onto the photovoltaics market, which it says is at an "inflexion point," predicting that costs of solar panels will reduce threefold by 2010.

Prices of solar arrays will fall threefold by 2010, experts claim

Applied, the world's biggest semiconductor tool producer, will now start making equipment used in solar panel production and hopes to cash in on what it sees as a major growth market.

Prices of photovoltaic panels are already being driven down by rising production volumes and improved efficiency, and the company hopes to accelerate the fall.

The predicted threefold decrease would bring the price of a solar panel array for a typical household down from around £9,000 currently to £3,000 in 2010, Charles Gay, general manager of Applied's solar operations, told edie.

Rising efficiency is part of the equation, he said: "For crystalline silicon, the most widely used type of photovoltaic panels, we expect efficiency to increase from 14% to 23 over the next five years, and for thin film from 8 to 14%."

Applied Materials helped reduce the costs of semiconductors used in PCs over the last few decades, and now wants to take advantage of its global reach to do the same for solar technology.

In July the company acquired the German flat panel display maker Applied Films, and wants to adapt the technology used to produce TV screens to produce solar panel equipment on a large scale, Chales Gay explained.

"The industry is about to take a quantum leap in terms of the quality of the equipment suppliers involved by having Applied Materials join this mix of infrastructure to support the growth of the industry," he said.

The company has chosen to make the move now because it believes that demand for solar has grown to match the production scale.

"The solar industry has reached the inflection point that Applied Materials has been waiting for, as solar customers seek economies of scale with suppliers who can better meet their needs for global support and who can provide advanced systems that meet technology, throughput, quality and yield goals," said Mike Splinter, AM president and CEO.

"We plan to change the cost equation for solar power through adaptation of our existing technology and new innovation in order to help make solar a more meaningful contributor to the global energy supply," he said.

The global market for solar could grow from the current $1bn to over $3bn in 2010, according to industry predictions.

Solar power will have to compete against other renewables, such as wind, as well as conventional power sources. But PV has two unique advantages, Charles Gay argues:

"Solar power is an abundant renewable resource, with the capacity to generate 125,000 TW as compared to around 20TW from wind. And it is already distributed, while the electricity from a central power plant or wind farm needs to be transported to where it is used, which involves extra infrastructure and power losses," he said.

More information on Applied Materials' solar strategy can be found here.